Uber investors blast company for failure to change: 'We have hit a dead end'

Travis Kalanick, CEO of Uber.
Chris Ratcliffe/Bloomberg via Getty Images
Uber investors Mitch and Freada Kapor want to change two things: Uber's toxic workplace, and the silence of Uber's backers when it comes to the "inexcusable behavior" of the company's leadership.

A former engineer's claims of sexism at Uber have rocked the company for days, leading to a teary apology from its CEO, Travis Kalanick. However, the claims were apparently only the tip of a much deeper problem inside the company's culture.

A bombshell report from The New York Times on Wednesday said a manager had been fired for groping women's breasts, employees had done cocaine in the bathrooms during company retreats, and a director had yelled gay slurs during meetings.

In an open letter to Uber's investors and board, the Kapors said Uber has ignored the behind-the-scenes work that some of its investors have tried to do for years to change the company culture. Freada led a workshop at Uber on unconscious bias in 2015, she said. They've both been contacted by multiple senior officials at Uber — although never by Kalanick himself, the Kapors said.

The Kapors, who invested early in Uber, are known in Silicon Valley for both their investing prowess as well as their passion about and engagement with issues of diversity in the tech industry. They created the Kapor Center to help increase access to STEM education and bring more diverse entrepreneurs into the tech ecosystem.

"We are speaking up now because we are disappointed and frustrated; we feel we have hit a dead end in trying to influence the company quietly from the inside," the Kapors wrote.

Specifically, the investors take issue with who Uber has chosen to lead what it calls an "independent" investigation into the former engineer's claims of sexism. Those people include former Attorney General Eric Holder, who has worked on Uber's behalf to advocate the company's concerns; Arianna Huffington, who is on the board of the company; and Uber's chief human resources officer, who reports to the executive team.

"We are disappointed to see that Uber has selected a team of insiders to investigate its destructive culture and make recommendations for change," the Kapors wrote. "To us, this decision is yet another example of Uber's continued unwillingness to be open, transparent, and direct."

Holder and his law partner Tammy Albarran said in a statement: "We intend to be thorough, impartial and objective, and we are conducting this review with the highest degree of integrity and professionalism."

The Kapors said they are fearful that Uber would be able to "manage its way past this crisis and then go back to business as usual." They had tried to involve the company in diversity projects run by Kapor Capital but failed, they said. The Kapors said that because their work inside the company has failed to bring about change, they are hoping public pressure might turn the company around.

"We are speaking out publicly, because we believe Uber's investors and board will rightly be judged by their action or inaction," the Kapors wrote. "We hope our actions will help hold Uber leadership accountable, since it seems all other mechanisms have failed."